The WACC of BH Global Ltd (BHGU.L) is 7.6%.
| Range | Selected | |
| Cost of equity | 9.50% - 12.70% | 11.10% |
| Tax rate | 19.00% - 19.00% | 19.00% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 6.8% - 8.4% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 2.4% | 2.9% |
| Equity market risk premium | 4.8% | 5.8% |
| Adjusted beta | 1.46 | 1.59 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.50% | 12.70% |
| Tax rate | 19.00% | 19.00% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 6.8% | 8.4% |
| Selected WACC | 7.6% | |
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for BHGU.L:
cost_of_equity (11.10%) = risk_free_rate (2.65%) + equity_risk_premium (5.30%) * adjusted_beta (1.46) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.